Christian Ethics - Lesson 11


By listening to this lesson, you will gain a comprehensive understanding of interventionism and its role in the Great Depression. You will learn that interventionism is an economic system that attempts to combine the best elements of capitalism and socialism, and that it involves politicians interfering with market forces to achieve desired political goals. Furthermore, you will understand that the theory that capitalism is to blame for the Great Depression is based on four myths, including the belief that a free market economy is unstable and that America's economy prior to the collapse was an example of unbridled capitalism. However, the reality is that there was significant governmental intervention throughout the 1920s, and interventionism actually deepens recessions and prolongs periods of misery by disguising the information produced by a market economy.

Ronald Nash
Christian Ethics
Lesson 11
Watching Now

Social Ethics

Part 6

VI. Interventionism

A. Definition of Interventionism

B. The Great Depression

1. Blamed on capitalism

2. Four basic myths

a. Instability of free-market economies

b. Unbridled capitalism in 1929

c. Herbert Hoover was a champion of capitalism.

d. Roosevelt's interventionism solved the Depression.

C. Social Security

D. Alternative to Social Security

E. Two basic reasons for poverty

1. External reasons

2. Internal reasons

  • Gain insights into philosophical ethics and Christian responses, and the Christian role in society regarding the state, justice, economics, and education.
  • In this lesson, Dr. Nash introduces you to the concept of hedonism, which is an example of a consequentialist ethic. He reviews non-hedonistic consequentialist philosophies, psychological hedonism, and ethical hedonism.
  • This lesson introduces you to the theory of deontological ethics and Emmanuel Conte. You will learn that the deontological ethic judges morality by examining the nature of actions and the will of agents rather than goals achieved.
  • In this lesson you will learn about the system of ethics that focuses on virtue and introduces the Four Cardinal Virtues, which are temperance, wisdom, justice, and courage, and emphasizes the importance of being the right kind of person who possesses the traits of character, and C.S. Lewis's book "Christianity" provides an informative treatment of the Four Cardinal Virtues and the Three Theological Virtues.
  • You will gain insight into C.S. Lewis's views on Christian ethics and the morality analogy he presents, where morality is like a fleet of ships that must fulfill three conditions to succeed: every ship must run properly, the relations between ships must be proper and orderly, and the fleet must head to the right destination.
  • You will learn about the importance of distinguishing between society and the state. Society is a voluntary organization of people, while the state is the group of people who claim a monopoly on the use of coercive force within a geographic boundary. By understanding this difference, you can prevent the government from interfering with your voluntary associations.
  • You will gain an understanding of how the professor's theory of the state in Social Justice in the Christian Church aligns with the New Testament. He explains that the state is a God-ordained institution to check against sin, and he is a moderate anti-statist who recognizes the need for government but also the inherent evil in any concentration of human power. The New Testament recognizes constraints upon governmental power, and Revelation 13 is an example of how the state can symbolize anti-Christian government. The lesson also discusses the concept of justice and how it is often invoked without a clear understanding, suggesting that Christians should study ancient Greece for a better comprehension of the term.
  • In this lesson, you will gain insight into the evangelical civil war that happened 20 years ago, learn about its early stages recorded by Clark Penick, understand the harmful effects of left-wing evangelicalism, and see how many evangelicals on the left became enamored with their own self-virtue in what they thought was a crusade to help the poor.
  • By studying this lesson, you will gain insight into the major differences between capitalism, socialism, and interventionism. You will learn that interventionism is often responsible for economic crises that are attributed to capitalism. You will also learn about the overlapping and continuum nature of economic systems and the gray area where an economic system may be viewed as socialism or interventionism.
  • This lesson discusses the decline of old liberation theology and how some of its proponents are now advocating for capitalism and democracy as being what the poor of the third world need, and presents shocking quotations from individuals characterized as evangelical, such as Jose Marquez Bonino, who promotes Marxism and praises tyrants like Castro and Mao Tse tung, as well as material about the three major kinds of Marxism that have existed in the world.
  • This lesson will provide you with a comprehensive understanding of interventionism and its role in the Great Depression, including the fact that blaming capitalism for the depression is based on four myths, and that interventionism actually deepens recessions by disguising the information produced by a market economy.
  • Through this lesson, you will gain an understanding of the crisis facing American education, as highlighted by Alan Blum's book The Closing of the American Heart and the author's complementary book. The focus is on the importance of values, standards, and morality in education, and the need to reopen the American heart to reopen the American mind. The lesson introduces the three kinds of illiteracy currently affecting Americans at every level of the educational process, with a particular emphasis on functional illiteracy, which refers to the inability to read, write, or use numbers well enough to get along in society.
  • In this lesson, you will learn about the incompetency of public school teachers in America, caused by academically weak students being attracted to the profession, lack of content courses in their college curriculum, unimpressive and radical left-winged professional educationists, and the National Education Association being an enemy of America's young people, with four essential steps to improve education, including getting a clear focus on the educational role of the family, increasing local control of education, changing the curriculum to prepare students for life after school, and changing teacher education programs.
  • Gain knowledge of the difference between the biblical ethic and other philosophical systems. Though it may seem simple, it is an underlying system that can lead to complex issues. The divinely revealed scriptures are the starting point for moral reflection, but not a ready-made answer. Some New Testament commandments are archaic or obsolete, and many modern moral problems are not discussed in the Bible.
  • You will gain insight into the pro-life stance and be equipped to inform others. Christians need not be timid about talking about these issues.
  • This lesson explores the arguments and counterarguments surrounding abortion, arguing for caution and conservatism in ending any life, emphasizing the need to balance the right of the mother with the rights of the infant, and briefly touching on the issue of rape and how it complicates the matter.
  • As you go through the lesson, you will learn about infanticide and euthanasia, and how the disrespect for unborn human life has led to an increase in cases of infanticide, along with some suggestions for what Christians should do in the case of children born with life-threatening handicaps.
  • In this lesson, you will explore the five major passages of Scripture related to homosexuality, including different interpretations of the story of Sodom and Gomorrah, and concludes that the Bible clearly condemns homosexual activity.
  • This lesson explores the topic of capital punishment in the context of Christian beliefs, arguing for consistency and emphasizing the need to view Old Testament laws in the context of specific situations that are no longer applicable.
  • This lesson discusses the three approaches to war and peace and distinguishes between principled pacifists and hypocritical, unprincipled pacifists, who are members of the political left and denounce American military actions but support violent revolutionary organizations.
  • You will gain an understanding of the growing issue of divorce and remarriage within the church, the responsibilities of Christian leaders in addressing it, and the need for Christians to think through what the Scripture teaches on these matters and formulate principles that will guide their thinking and conduct.
  • This lesson provides insight into how responsible Christians can make ethical decisions about birth control, considering the importance of intention, distinguishing between ethically acceptable and unacceptable forms of birth control, and emphasizing the importance of wise and careful means in achieving family planning goals.

Theoretical and theological basis for Christians  living an ethical life.

Dr. Ronald Nash

Christian Ethics



Lesson Transcript


Now, I've already told you what interventionism is. It is an economic system that tries to combine the best elements of capitalism and socialism. There are no best elements of socialism. Socialism has nothing to offer, nothing to contribute. But what we have in America and in other industrialized nations of the West is a form of a mixed economy in which the politicians think they should be free to interfere with market forces whenever that will help bring about certain desired political goals. Now, there's no need to repeat what I've already said about interventionism. You have that earlier lecture. But notice what I do next. After explaining what interventionism is, is in Chapter 11, I then go on to talk about the Great Depression and Social Security. Now, the reason I do that is this The Great Depression is often a calamity, a world wide calamity that is laid at the feet of capitalism. If you attended a hundred college lectures on the Great Depression, 100 of them, I guarantee that at least 99 of them would tell you that the reason for the Great Depression was the fact that America was too capitalist during the 1920s and the 1930s. So what I want to do in chapters 12 and 13 is make it clear to you that it wasn't capitalism that was to blame for the Great Depression. There are a number of myths that are at work in all of this. All right. The reason I go on in chapter 14 to make some comments about America's infamous perverse Social Security system is because this is another example of economic interventionism at work.


[00:02:24] The theory that capitalism is to blame for the Great Depression is a consequence of four basic myths, and I explain what those myths saw on Pages 126 and 127 of the Poverty and Wealth Book. The first myth that must be eliminated before we are able to do anything serious about the Great Depression says that a free market economy is notoriously unstable and leads inevitably to economic cycles in which periods of prosperity are followed by recessions and depressions. In other words, it is capitalism that produces periods of boom and bust, periods of prosperity and then depression. The simple fact is that all any recession or depression is is a natural period of time in which an economy tries to work out certain glitches that have developed into it. In a system you see, no matter what economic system you're dealing with, there will be there will be bad investments, there will be bad judgments. People will go too deeply into debt. And so every once in a while, market forces produce a situation in which those bad judgments, those malinvestment, have to work themselves out. You're going to have economic cycles in capitalism. I'm not saying that that you will not. But what interventionism does is this it it deepens recessions, it deepens depressions, It prolongs the period of misery, because as governments interfere with the performance of a market economy, they disguise the signals, the information that a market economy is always producing. I told you earlier in the course how rising and falling prices in an unfettered market can provide important information to astute entrepreneurs. Interventionism messes up that that information. The information produced by a market system and thus deceives people into pro into continuing their bad investments or leading to and leading them to invest in the wrong ways.


[00:04:51] So it is not it is not a market economy that produces that leads inevitably to these economic cycles. What makes those those inevitable economic cycles even worse is the kind of governmental intervention intervention that that we explain in the book. Now, the second myth is that prior to the economic collapse of 1929, America's economy was an example of unbridled capitalism. Well, that's a joke, I suppose. People who don't take the time to look at that at the 1920s may be deceived by that. When you look at the information that I provide in the Poverty and Wealth book, you see clearly that there was enormous governmental intervention through the form, through the through such means, for example, as increase in tariffs, huge loans to the recovering nations of Europe following World War One and a number of other measures that I mentioned. What you have throughout the 1920s is growing intervention with the market system, and it was that growing intervention and the consequences that resulted from it that helped produce the economic collapse of 1929. The third myth is that Herbert Hoover was one of America's great champions of capitalism and a free market economics. The truth is, and again in the book, I provide the data on this, the details on this. Herbert Hoover was an interventionist. He was almost as much an interventionist as Franklin Roosevelt was. And when you look at the steps that Hoover supported in the American economy following the collapse of the stock market in October of 1929, those are typically interventionist measures. And they and it was those interventionist measures that took what would have been a short, minor downturn in the American economy and turned it into a worldwide depression. There's no way in which one can excuse the foolish actions that Hoover took, but he took them not as a free market defender.


[00:07:04] He took them as an ardent interventionist. Read the book. Chapter 13 Myth Number four Franklin Roosevelt led the nation out of the Depression by rejecting Hoover's noninterventionist measures, as we've already said. Hoover was not a noninterventionist. What Roosevelt did was simply extend and expand Hoover's interventionist measures, and it was Roosevelt's incredible folly that continued to deepen the recession and that continued to keep the United States in the throes of that horrible, horrible period of time. Take a look, if you will, a page 144 in the book Poverty and Wealth, which gives you the number of unemployed people for the various years of the Depression, at least through between 1929 and 1939, and also the percentage of the labor force that was unemployed during that decade. If you'll notice, the number of unemployed in America reached its peak, a peak of 12,478,000 in 1932 and a another. Even a larger number of unemployed 12,740 4000 in 1933. Now we can thank the Democratic Congress and Herbert Hoover for that. By 1933, one in four working Americans was unemployed. 25% of the labor force was unemployed. And that was a consequence of governmental stupidity and governmental culpability. Now, if Franklin Roosevelt had done nothing at all, but if he had simply allowed things to work themselves out, the situation would have corrected itself. Within a within a matter of a few years. And so we find that the number of unemployed people reduces from 10 million to 9 million to 7 million to 6 million. And then all of a sudden in 1938 and this again is never talked about in 1938, the unemployment in America jumped to over 10 million people again. Why? Well, I'm going to let you read Chapter 12. But what you'll find there are samples of the interventionist measures that Roosevelt undertook in 1937 in cooperation with the Democratically controlled Congress as a way of paying back the big labor unions in America.


[00:09:50] And Roosevelt and the Congress and the labor unions of America are directly responsible for that almost 80% increase in American unemployment between 1937 and 1938. Franklin Roosevelt was a miracle worker. He did do something that no one else in American history had ever done before, and that brought it. It wasn't what you think. Franklin Roosevelt is the only president, the only political leader in history to create one depression within another depression. It's exactly what he did. And the book details the foolish interventionist measures that he and his liberal Congress helped bring about. Well, America is still paying the price for Roosevelt's foolishness because what he did, of course, was set us on an irrevocable path towards big government and governmental interventionism with the economic system. What about Social Security? Well, many people make the mistake of thinking that the Social Security taxes, which now are the largest, bulk of which is the biggest bulk of taxes that most Americans pay. It really is. Most Americans think that they have some kind of Social Security bank account in Washington into which all of their Social Security taxes go. And then when they get ready to retire, they start drawing from their fund. But the typical American does not realize is that there is no Social Security fund in Washington, that this money comes in the front door and it goes out the back door. Until the recent dramatic increases in Social Security taxes enacted during the 1980s, which incidentally had to have had a devastating effect upon the American economy. When we start looking for the recession, the reasons for the recession of 19 9192 do not overlook, do not overlook the Incredible Tax Act of 1990, which was the largest tax increase in American history, and which George Bush made the mistake of falling in line with the Democratic liberals in Congress so that he could remain on their good side.


[00:12:15] And don't overlook the significant impact that increased highly increased Social Security taxes had upon American productivity and and economic activity. Now, the idea behind the Social Security system was that future generations, through their contribute, through their contributions, through their forced expropriation, that that money would pay for the elderly who were presently receiving Social Security. Now, that worked for a while. That worked pretty well, I guess as long as you had about 16 workers for every person receiving Social Security benefits, then the taxes could remain relatively low. But you see, as the demographics of American population change and the number of elderly people, the number of retired people increases and the number of people working and thus required to support those who are retired decreases, The situation has changed. We presently have, for every retired person receiving Social Security in America, we presently have that person's income supported through the taxes of four working people. That's why taxes must be so high. So things really get bad. By the time we reach the early 2000. Somewhere around 2020, 2030 every unless some horrible calamity if. It's the world and we all succumb to some new flu virus or something. By the year 2030. It is estimated that every person receiving Social Security benefits will have to be supported by the Social Security taxes of two working people, 2 to 1. What that means is that if the government keeps its promises to those of us who are still alive in the year 2030, working Americans will have to pay Social Security taxes approximating 40% of their income, 40% of their income. The Social Security system is an immoral it is an unjust pyramid scheme that lies about the true nature of the system. I'd like you to recall our early discussion of statism, the Social Security system, as it as it has been structured from the beginning.


[00:14:55] It is really a statist approach. The government decides how much money should be taken. The government set up this bizarre, this immoral, this unjust and this ultimately self-defeating system in which money comes in the front door and goes out the back door. Incidentally, there is a huge excess of Social Security monies being collected now because of the huge increases in the tax and the Social Security tax rate. What most Americans don't realize is that that money is not being kept for when it will be needed. It is going out the back door to pay for to pay for congressionally mandated programs. And what the government is doing is simply issuing IOUs against the eventual payday when those funds will have to be allocated to retired people. So the money is being spent now, but it is being spent for nonsocial security purposes and the government is borrowing against the Social Security system. I think if the typical American understood the corruption of how Congress and the and the White and the executive branch have handled the Social Security system, there might easily be a revolution in this country, especially when you contrast the present situation to the other way in which we could have handled this. Suppose, instead of this enforced statist, queasy socialist approach to Social Security, we had chosen to pursue the well-being of our elderly citizens on the basis of freedom. Suppose we had opted instead for something like the individual retirement accounts that were established in the early 1980s under under Reagan. Suppose, in other words, that yes, the government had required us to contribute percentages of our income equal to the percentages that were in force all of these years. But suppose that that money, instead of going into this amorphous governmental monstrosity.


[00:17:20] Suppose each of us had been mandated by government to place those amounts of money in individual retirement accounts, in which that money would always remain. Ours would always continue to grow at compound at compound interest in a nontaxable way until we reach retirement age and could then begin to withdraw that money. I heard someone estimate the other day that he would be he would be in his mid-fifties like I am, that if he had been operating under a Social Security system like that from the time he began to work, he would presently have in his Social Security account, of course, which would be treated like a large IRA, well over $1,000,000, with the likelihood that it could double in another ten years. Now, notice the benefits of that in contrast to the benefits of the present system. Under the present system, if a man dies two days before he reaches retirement age and his let's say his this man and his wife are both killed in an automobile accident, then all of those funds that that man and his wife have contributed to Social Security are gone. There's nothing there for that for their estate. There's nothing there for their children, even though over the over their lifetimes, the amounts of money they would. Next. And the accumulated interest that would have resulted would would amount to a huge sum. The money's gone. The federal government becomes kind of a winner in that situation. But let's suppose, on the other hand, that the same couple husband and wife have in their huge Social Security I.R.A. account well over $1,000,000 and through some kind of tragedy, they're both killed. And let's say they have several children. That money goes into their estate and can be used for any purpose they wish.


[00:19:39] They might wish to make a large contribution to the well-being of some old people's home. They might wish to make a large contribution to some social welfare program. They might wish to make a large they might wish a large amount of that money to go to their children or to their church or to a college of their choice. But that money under the present system is gone forever. The people ask, What about the people who are less fortunate who can't work? Well, we could have handled that all right. There all is. My book explains there isn't a problem in the area of economics, but a freedom based approach can solve. And we could have handled that through some kind of minor taxation to take care of the disadvantaged, the mentally incompetent, those who have no one else to care for them. But keep this in mind. All right. That take take, for example, of a husband and wife who have a mentally retarded child or a severely physically handicapped child. In the case of two work, one or two working parents, there would be a huge nest egg left over following their death to take care of that retarded child or that physically retarded child. The number of people who would fall through the cracks under a voluntary system would be far less than many people think because these other disadvantaged people would be would be covered in this other way. Well, it's time if you don't already know that you learn the truth about the Social Security system and what your government has been doing to you and to your heirs and to your children or to your parents. Now, in the last couple of chapters of the book, I talk about poverty in America and poverty in Third World.


[00:21:50] I hope you will study those chapters carefully. I hope you will recognize, for example, the lie that exists whenever somebody says America isn't doing enough to help its poor people. Read the next to the last chapter of poverty and wealth. Do you realize that we could eliminate poverty in America completely, Totally. For one fourth of what America presently spends to deal with problems of poverty? By my next to the last chapter gives you the details. The fact is that $0.75 out of every dollar that America spends to fight poverty, it actually never reaches the poor. Where does it end up? It ends up in the pockets and the bank accounts and the wallets of well-paid governmental functionaries. That's an enormous overhead. If we could find a way to eliminate the overhead in the in the welfare bureaucracy, we could eliminate poverty for one fourth of what we presently pay. So these people who tell you that we're not spending enough to fight poverty are foolish. Maybe they're a little stupid, or maybe they're just ideologues. The problem is not that we're not spending enough money. The problem is we're spending too much of it foolishly, irresponsibly. Of course, we also need to recognize that poverty exists for reasons that are often personal. My last two chapters point out that there are two basic reasons for poverty. Some of those reasons are external. That is, they exist because of conditions that exist outside of the individual person. The laws of a particular country may be unjust. Listen, look at what's going on in Russia. Even as I speak as as Russians who had managed to save small amounts of money for their old age are now being thrust into poverty. Caused by the enormous inflation brought about by the irresponsible expansion of the money supply by the left wing Congress in Russia.


[00:24:12] That's a case of poverty being produced by governmental action. Poverty also can exist because of conditions that are internal to people. For example, if people are illiterate, the odds are very strong that they're going to be poor. If people are lazy, indigent, indifferent, poorly motivated, they're likely to be poor. So don't assume that all poverty results from oppression. Don't assume that all poverty results from unjust situations that exist in society. Recognize that governments themselves can either cause poverty by taking statist measures or can encourage people to lapse into poverty by failing to provide an economic climate in which people can seek self-improvement. Well, you're capable of reading those chapters for yourself. We must move on to another subject, and that will be all that we will say about economics. I hope that the material in the last half of the Poverty and Wealth book is helpful to you.